Waterfront property commands a premium – but there’s a catch.
Summer holiday-makers dreaming of buying their own waterfront property will have to be ready to spend big bucks, new data shows.
Figures from Homes.co.nz show just how much of a premium waterfront homes and properties in summer hot spots command.
Mt Maunganui tops the premium list. Homes.co.nz estimated that the median value of properties within 50 metres of the ocean was more than $2.3 million, which was almost 150 per cent above the town’s median of $923,462.
Russell in the Bay of Islands had the second-highest premium. The median value of its waterfront properties was $1.3m. That’s 89.1 per cent above the town’s median of $737,107.
Russell also recorded the highest price paid for a property within 50 metres of the ocean – 49 Okiato Rd sold for $7m in February.
The five-bedroom house also has a connection to a notorious chapter in New Zealand’s history. It was originally built for ‘‘Mr Asia’’, Terry Clark.
Picton, in the Marlborough Sounds, and Whangaparaoa, north of Auckland, had the nexthighest premiums. Values of waterfront properties in those areas came in at 88.3 per cent and 83.7 per cent higher than the town’s medians.
Lakeside properties also attract higher premiums, and Rotorua came in ahead of Taupo¯ here. Homes within 50 metres of Lake Rotorua had a median value of $941,876, which was 82.9 per cent above the city median.
In Auckland, there were four suburbs with properties within 50 metres of the water which had median values of $4m plus and triple-digit premiums over the suburbs’ median values.
They were Campbells Bay, Parnell, Milford and Orakei. Campbells Bay had the highest median value ($5.19m), but Milford had the biggest premium, of 203.4 per cent.
Homes.co.nz chief data scientist Tom Lintern said a summer at the seaside had reinforced a traditional demand. ‘‘Being near the water is in our DNA.’’
But the data turned up a few surprises. There was actually a waterfront discount for properties in Wellington’s Roseneath and Seatoun.
Potential reasons included a higher premium being placed on views or the additional upkeep required, Lintern said.
‘‘Although a beachfront property is a dream for many, it’s important to remember that not only will you likely pay a significant price premium, but many will often incur additional costs to maintain and could have insurance implications in the future.’’
The Homes.co.nz data comes just days after Quotable Value (QV) general manager David Nagel warned that rising sea levels had implications for coastal property.
He cited a report by the Deep South National Science Challenge, which revealed that an expected 10cm sea rise over the next 20 years would leave at least 10,000 homes in our biggest cities effectively uninsurable by 2050.
But for many, the lure of waterfront property outweighs any of those future risks, especially in the age of Covid.
Century 21 owner Derryn Maye said the real estate industry had seen an explosion of interest in coastal properties over the past nine months, and Covid-19 was a key instigator.
Last year’s lockdowns had shown many Kiwis that remote working was viable, but the pandemic had prompted a global appreciation for coastal living and the healthy outdoors.
Given record low interest rates, the attraction of coastal real estate made total sense, Mayne said.
‘‘As well as very low debt servicing costs, a coastal property is now more do-able for many Kiwis thanks to the likes of Airbnb. People know they can cover their expenses by letting out their holiday homes with strong domestic tourism demand.’’